BILL NUMBER: SB 603	CHAPTERED  07/28/99

	CHAPTER   203
	FILED WITH SECRETARY OF STATE   JULY 28, 1999
	APPROVED BY GOVERNOR   JULY 27, 1999
	PASSED THE ASSEMBLY   JULY 15, 1999
	PASSED THE SENATE   APRIL 29, 1999
	AMENDED IN SENATE   APRIL 27, 1999

INTRODUCED BY   Senator Speier

                        FEBRUARY 23, 1999

   An act to add Section 6166 to the Government Code, and to amend
Sections 19005 and 19104 of the Revenue and Taxation Code, relating
to state levies.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 603, Speier.  Remittances and interest.
   Existing law authorizes the Franchise Tax Board to accept payment
by credit card for taxes, interest, penalties, and fees, if specified
conditions are met.
   This bill would remove the present restrictions regarding payments
by credit card, and instead would permit these payments to be made
by credit cards at that time and under those conditions as the
Franchise Tax Board may prescribe.  This bill would also require the
Franchise Tax Board and any other state agency accepting payment by
credit card to notify each eligible payer of that fact, and to
provide, as specified, for billing statements that allow for payment
by credit card.
   Under existing law, the Franchise Tax Board is authorized to abate
interest on unpaid taxes that is attributable to errors or delays
caused by an officer or employee of the Franchise Tax Board in the
performance of a ministerial or managerial act.
   This bill would also permit the abatement of interest accruing
from a deficiency based on a final federal determination of tax for
the same period that interest was abated on the related federal
deficiency under specified provisions of the Internal Revenue Code.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 6166 is added to the Government Code, to read:

   6166.  Any state agency accepting payment by a means of credit
card, whether pursuant to this chapter or Section 19005 of the
Revenue and Taxation Code, shall, when sending a billing statement,
notify each payer permitted to make payment to that agency by means
of a credit card of his or her option of making payment by means of a
credit card.  Each state agency that sends a billing statement to an
individual who is allowed to make payment to that agency by means of
a credit card shall provide either of the following on that
statement or on a document provided with the statement:
   (a) A designated space on the payment form upon which the payer
can provide a credit card number, expiration date, and signature.
   (b) Complete instructions as to the procedure, by means of
telephone or otherwise, that the payer must follow in order to pay by
means of a credit card.
  SEC. 2.  Section 19005 of the Revenue and Taxation Code is amended
to read:
   19005.  The tax, and any interest and penalties, shall be paid to
the Franchise Tax Board.  Except as provided in Section 19011 with
respect to an electronic funds transfer, remittances may be in the
form of a check, payable in United States funds to the Franchise Tax
Board, at the time and in the manner as the Franchise Tax Board may
prescribe or, notwithstanding Title 1.3 (commencing with Section
1747) of Part 4 of Title 3 of the Civil Code, in the form of a credit
card or other payment device as defined in Chapter 2.6 (commencing
with Section 6160) of the Government Code, at the time and in the
manner that the Franchise Tax Board may prescribe.  If a check or
credit card remittance is not paid by the bank on which it is drawn,
the taxpayer tendering the check or credit card remittance remains
liable for the payment of the tax, and all interest and penalties, as
if the check or credit card remittance had not been tendered.
  SEC. 3.  Section 19104 of the Revenue and Taxation Code is amended
to read:
   19104.  (a) Interest upon the amount assessed as a deficiency
shall be assessed, collected, and paid in the same manner as the tax
at the adjusted annual rate established pursuant to Section 19521
from the date prescribed for the payment of the tax or, if the tax is
paid in installments, from the date prescribed for payment of the
first installment, until the date the tax is paid.  If any portion of
the deficiency is paid prior to the date it is assessed, interest
shall accrue on that portion only to the date paid.
   (b) If the Franchise Tax Board makes or allows a refund or credit
that it determines to be erroneous, in whole or in part, the amount
erroneously made or allowed may be assessed and collected after
notice and demand pursuant to Section 19051 (pertaining to
mathematical errors), except that the rights of protest and appeal
shall apply with respect to amounts assessable as deficiencies
without regard to the running of any period of limitations provided
elsewhere in this part.  Notice and demand for repayment must be made
within two years after the refund or credit was made or allowed, or
during the period within which the Franchise Tax Board may mail a
notice of proposed deficiency assessment, whichever period expires
the later.  Interest on amounts erroneously made or allowed shall not
accrue until 30 days from the date the Franchise Tax Board mails a
notice and demand for repayment as provided by this subdivision.
   (c) (1) In the case of any assessment of interest, the Franchise
Tax Board may abate the assessment of all or any part of that
interest for any period in any of the following circumstances:
   (A) Any deficiency attributable in whole or in part to any
unreasonable error or delay by an officer or employee of the
Franchise Tax Board (acting in his or her official capacity) in
performing a ministerial or managerial act.
   (B) Any payment of any tax described in Section 19033 to the
extent that any delay in that payment is attributable to that officer
or employee being dilatory in performing a ministerial or managerial
act.
   (C) Any interest accruing from a deficiency based on a final
federal determination of tax, for the same period that interest was
abated on the related federal deficiency amount under Section 6404(e)
of the Internal Revenue Code, and the error or delay occurred on or
before the issuance of the final federal determination.  This
subparagraph shall apply to any ministerial act for which the
interest accrued after September 25, 1987, or for any managerial act
applicable to a taxable or income year beginning on or after January
1, 1998, for which the Franchise Tax Board may propose an assessment
or allow a claim for refund.
   (D) For purposes of this paragraph:
   (i) Except as provided in subparagraph (C), an error or delay
shall be taken into account only if no significant aspect of that
error or delay can be attributed to the taxpayer involved and after
the Franchise Tax Board has contacted the taxpayer in writing with
respect to that deficiency or payment.
   (ii) Within 180 days after the Franchise Tax Board mails its
notice of determination not to abate interest, a taxpayer may appeal
the Franchise Tax Board's determination to the State Board of
Equalization.  The State Board of Equalization shall have
jurisdiction over the appeal to determine whether the Franchise Tax
Board's failure to abate interest under this section was an abuse of
discretion, and may order an abatement.
   (iii) Except for the amendment adding clause (ii), the amendments
made by the act adding this clause are operative with respect to
taxable or income years beginning on or after January 1, 1998.  The
amendment adding clause (ii) is operative for requests for abatement
made on or after January 1, 1998.
   (2) The Franchise Tax Board shall abate the assessment of all
interest on any erroneous refund for which an action for recovery is
provided under Section 19411 until 30 days after the date demand for
repayment is made, unless either of the following has occurred:
   (A) The taxpayer (or a related party) has in any way caused that
erroneous refund.
   (B) That erroneous refund exceeds fifty thousand dollars
($50,000).
